Global markets have fluctuated wildly since those dark New Year prophesies. But lately the headlines have been more positive. The latest official economic figures showed a “spending spree” had helped growth accelerate to stronger-than-expected 3 per cent. And rather than plunging towards US50¢ our dollar has climbed back over US75¢ for the first time since the middle of last year. The gloomy start of the year was driven by unfounded fears about economic outlook, a fresh look at the data suggests that the economy has proved far more resilient than many expected.
Some more interesting recent results that should be reflected upon and considered when looking at any business or investment decisions include but are not limited to:
- NSW and VIC continue to reflect strong economies with high levels of property clearance rates at auctions (NSW 75%; VIC 72%; QLD 56%) supported by growing infrastructure spending by states.
- Considerable interest has been seen in the rural industry with properties changing hands and accumulators increasing activity in the market.
- The issuing of the lease by the QLD Government for the Adani Carmichael mine remains on hold.
- The USA has flagged that interest rates will remain on hold for a much longer period than first expected (it was assumed that they would increase) reflecting a weaker economy.
- The increase in the Australian dollar will reduce our competitiveness in tourism and exports.
- Unemployment dropped to as low as 5.8% on the back of NSW and VIC growth.
Interestingly, recent data from around the world that reflects each of the major economies and the debt levels, paints Australia in an attractive light (however, such results always need to be considered in light of many factors). The USA’s debt to GDP (Gross Domestic Product) was 102%, France 96%, United Kingdom 86% and Australia at 33%. The stand outs Japan at 229% and Greece at 179% seem astounding.
Despite the challenging environment, Gross domestic product has continued to grow but Net national disposable income per capita – a key measure of living standard has stalled which means that as a nation we are growing but not getting paid as much as we used to for what we produce.